Beaubier,
T.C.C.J.
(orally):—This
is
an
appeal
pursuant
to
the
Informal
Procedure
of
this
Court.
It
was
heard
in
Edmonton,
Alberta
on
August
12,
1993.
The
witnesses
were
the
appellant
and
his
accountant,
Mr.
Blacklock,
for
the
appellant.
The
respondent
called
Mr.
Shaun
Helmers,
a
qualified
expert
appraiser.
The
appellant
appealed
a
reassessment
respecting
the
capital
cost
allowance
of
farm
buildings
claimed
in
the
amount
of
$34,950.
The
appellant
is
a
poultry
farmer.
In
1988
the
appellant
purchased,
in
a
non-arm’s
length
transaction,
a
chicken
farm
consisting
of
equipment,
buildings
and
approximately
one-
quarter
section
of
land
situated
beside
Highway
Number
16,
12
/2
miles
east
of
Edmonton
for
$80,000.
In
assumption
3(e)
the
respondent
detailed
the
basis
upon
which
it
allowed
depreciation.
3(e)
reads:
3(e)
the
appraised
value
of
the
depreciable
property
(the
property”)
that
was
acquired
as
part
of
the
real
estate,
excluding
the
house
and
garage
which
are
considered
to
be
personal
property
of
the
appellant,
was
$22,000,
calculated
as
follows:
|
Poultry
House
I
|
$7,000
|
|
Poultry
House
II
|
6,000
|
|
Storage
Building
|
6,000
|
|
Quonset
Building
|
3,000
|
|
Total
|
$22,000
|
The
appellant
has
not
brought
any
evidence
to
upset
the
itemized
values
of
properties
described
in
the
four
items
detailed
in
3(e).
The
Court
finds
that
the
total
value
of
the
property
purchased
by
the
appellant
was
between
$101,500
and
$103,000
based
upon
the
respondent's
documents
which
were
filed
as
Exhibits
A-1
and
R-16.
Both
of
these
documents
were
prepared
by
members
of
the
Appraisal
Institute
of
Canada
for
the
respondent.
In
both
of
these
documents
the
value
of
the
land
was
arrived
at
and
then
the
depreciated
value
of
the
buildings
was
determined.
Mr.
Helmers
testified
that
in
valuing
a
farm
purchase,
the
buildings
are
usually
of
negligible
value.
However,
in
this
case,
the
purchaser
bought
intending
to
go
into
a
poultry
operation
to
the
knowledge
of
the
seller.
The
farm
was
set
up
for
a
poultry
operation
and
the
buildings
were
constructed
and
equipped
for
that
purpose.
The
purchaser
uses
them
for
a
poultry
operation.
Fixing
up
was
required,
but
even
one
building
that
he
intended
to
tear
down
is
still
in
use.
The
result
is
that
the
Court
finds
that
farm
buildings
and
improvements,
which
were
not
described
in
assumption
3(3)
are
capital
assets
for
which
the
appellant
paid
a
consideration
in
his
1988
purchase.
Different
values
were
attributed
to
these
in
the
respondent's
two
documents.
There
were
also
different
values
attributed
to
the
buildings
in
an
appraisal
for
mortgage
purposes
done
by
Alberta
Mortgage
Development
Corporation
on
May
6,
1988
and
filed
as
Exhibit
R-H.
This
document
was
not
supported
by
oral
expert
evidence,
nor
was
Exhibit
A-1
supported
by
oral
expert
evidence.
The
assets
and
values,
by
Exhibit,
are
as
follows
(and
going
across
is
R-16,
A-1,
R-TI):
|
R-16
|
A-1
|
R-11
|
|
Garage
|
$617.23
|
no
figure
|
$2,000
|
|
Yard
improvement,
well,
septic
|
|
|
system
services
|
$3,000
|
$3,000
|
no
figure
|
|
(landscaping)
|
|
The
second
garage
was
described
by
both
parties
as
of
negligible
value,
although
it
is
apparently
in
some
use.
In
addition,
a
back-up
generator
that
Alberta
Agricultural
Development
Corporation
valued
at
$5,000,
is
not
in
consideration
because
it
is
not
yet
in
operation.
The
appellant
testified
that
the
garage
is
a
two
vehicle
garage
which
houses
the
farm
pickups.
The
respondent's
appraiser
estimates
that
it
would
cost
$12,344.64
to
construction
it.
Simply
put,
in
1988
the
garage
was
valued
by
that
appraiser
at
$617.23
but
in
the
Courts
view
had
more
value
left
in
it
because
it
is
still
standing
and
in
use.
In
these
circumstances
the
$2,000
figure
appears
to
be
the
proper
figure
and
it
is
adopted.
One
of
the
respondent's
documents
included
landscaping
specifically
in
the
$3,000
figure;
the
other
did
not.
They
are
both
professionally
prepared
documents
of
the
respondent
and
therefore
the
document
and
interpretation
most
favourable
to
the
appellant
is
adopted,
“
Yard
improvements”
could
very
well
mean
"fencing".
This
interpretation
is
the
most
favourable
to
the
appellant
and
in
the
circumstances,
the
Court
adopts
it.
Therefore“
fencing,
well,
septic
system
services”
are
fixed
at
$3,000.
The
result
is
that
a
total
of
$5,000
is
added
to
the
$22,000
assessed
as
depreciable
property
for
a
total
of
$27,000.
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